Insurance and insurers

Chapter XIV Insurance and insurers Insurance is beneficial not only for traders who carry insurance but also in broader terms for towns and countries, for which there are two strong reasons. The first benefit of insurance is that it enables the traders to engage in a wider variety of businesses. If there is no possibility of insurance, the trader will not be willing to risk the amount of money needed to cover the costs of transport by sea, so it is better to not engage in such enterprise at all, considering the chances of loss. On the other hand, if insurance is an option, I would rent the ship, regardless of the size, and undertake any risk I am prepared for, and insurance will cover the rest. The money paid for insurance policies fills the state budget and is also beneficial for individual persons, ships, customs and all classes of citizens. The second reason is that if the ship befallen by mishap were in the possession of a sole trader, that man would suffer terrible financial consequences or bankruptcy and, consequently, there would be one trader less. However, when more of them agree to share the risk of the same venture, it is not as hazardous since each of the men involved can handle losing one hundred, two hundred or three hundred gold coins. In the case of such circumstances, each underwriter suffers the loss to a certain extent, but none of them is in danger of utterly failing. Thus, providing traders with insurance is an essential and necessary option in every city that wants to be renowned for its trade business.

After outlining all the basic and beneficial features of insurance, we should now make a mention of the provisions referring to the insurers, those who are underwriters and those who are insurance carriers. Those persons who obtain an insurance policy (carriers) have to be mindful of three things: first, the policy must be formally drawn up so as to include all safety measures and be binding in order to avoid any disputes or ambiguities; safety precautions must be at the highest level and in accordance with the customs of a particular state. In the context of written agreements, I found the customs and priorities adhered to in Barcelona to be the most valid and appropriate. Second, the insurance carrier must carefully consider the character and merit of potential underwriters, who must not only be of good virtue but also reliable and in a good position in order to execute what their duty demands. If only one of them is quarrelsome by nature, this spirit will affect all the others. Third, the insurance premium paid for the policy needs to be carefully considered and one must negotiate the price to be as convenient as possible. The trader must obtain insurance because his risk will thus be considerably lesser. Nobody ever regretted applying for insurance, but many a trader was ruined for not doing so. Insurers (underwriters) should remember to be very attentive to any news about the sea and always be informed of pirates, unsavory characters, wars, treaties and any oppressive measures, as well as anything else that might affect transport by sea. In their office they should keep a map of the sea routes and be familiar with all the harbors, coastlines and distances between various

destinations. They must take into account the circumstances of the patrons and traders who apply for insurance policies, the state the ships are in and the quality of the merchandise. After considering all this, they must issue insurance policies for every ship and do this continuously, because one vessel compensates for another, and when you enter many deals, the possibility of profiting increases accordingly. Continuity is of the essence because if one is fearful and insures only a single ship, the risk of loss is immense because if the ship suffers any mishap there are no means to cover that loss. This overview on the subject of insurance will surely suffice.